Natural Gas Catches a Bid as the U.S. Drowns in Supply

Trader Mark submits:On your mark... get set.... speculate!Since commodities have little to do with actual supply and demand in the physical market (as the world swims in oil, and the U.S. in natural gas), and everything to do with the supply of fiat currencies chasing physical assets, let us see if Bernanke can cause natural gas to take off. This has been the one huge laggard of the year, as nat gas is difficult to transport and hence reflects the domestic economic situation more than most other commodities. The commodity has spiked the past 2 days and the ETF (UNG) now sits at $6, just below the 50 day moving average. With oil peaking it head over its yearly highs Tuesday, speculators are in desperate search to find the next hot thing, as driving cotton and sugar limit up every day for 3 months in a row has gotten boring. The performance of natural gas has not just been bad, but indeed horrid when you consider it is priced in dollars just like every other commodity!Complete Story »

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Last December, traditionally permabullish energy trader Andy Hall shocked the world when he became the first casualty of the oil crash after Phibro, his 113 year old employer then owned by Occidental Petroleum after its sale by Citigroup, would liquidate in the US after it failed to buy a buyer. He wouldn't be the last.

By PortfoliV:Oil and natural gas have been very hard to trade in recent months. The fundamentals that underlie both of the commodities are both complicated and volatile. And if that wasn't enough, there is also the uncertainty about whether prices are moved around by actual fundamentals or just by traders and speculation.

ETF Database submits: After a disappointing GDP growth number sent the markets lower to start the day, equities surged back in afternoon trading to finish the day at breakeven, with only the Nasdaq registering a measurable gain posting an increase of 0.1%. This came as a result of the U.S. reporting Q2 GDP growth of just 2.4%, slightly less than the expected reading of 2.5%.

Trader Mark submits:Wheat, sugar, coffee, cocoa, corn, gold, silver - whatever speculators can get their hands on with fiat money (ex natural gas which is in a personal nightmare), it's time to bid it up to the moon.

Michael Johnston submits:After a government report showing that natural gas supplies increased less than expected last week, the United States Natural Gas Fund (UNG) climbed higher by almost 3% on Thursday, extending a rally that has seen the popular commodity fund add almost 20% this month.

Kurt Brouwer submits: In all the furor about potential inflation and the pricing pressure on energy, one amazing anomaly stands out — natural gas. In my view, it is an almost perfect fuel and energy source, yet it is getting cheaper and cheaper compared to oil. What’s up?